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Mishandling of client funds could be malpractice

by | Aug 4, 2020 | Legal Malpractice |

Lawyers owe a fiduciary duty to their clients. In other words, lawyers must act in the best interests of their clients. When lawyers breach their fiduciary duties, it might constitute malpractice. One of the most common ways lawyers breach their fiduciary duties is through the mishandling of their clients’ funds.

An ethical obligation to safekeep property

Attorneys are ethically bound to safekeep property on the behalves of their clients. This means lawyers must keep client funds separate from the private accounts of the attorney, as well as:

  • Notifying the client when relevant funds become available
  • Maintaining complete and accurate records concerning client funds
  • Providing clients with an accounting of the funds upon request
  • Prompt payment or delivery of client funds

Issues often arise when an attorney commingles client funds with law firm funds. An attorney may do so with every intention of replacing the client’s funds, but intentions don’t count for much. Commingling is a violation of ethical rules. Other common situations involving the mishandling of client funds include:

  • Failing to keep funds in a designated trust account
  • Stealing a client’s funds
  • “Borrowing” a client’s funds to pay for something else
  • Failing to maintain a proper accounting or records of a client’s funds
  • Acting carelessly concerning a client’s funds
  • Using client funds for any reason other than their intended purpose

If your attorney cannot account for your funds or seems to be evasive when the issue comes up, you should be suspicious. You may wish to retain other legal counsel to work on your case. You should also discuss your legal options concerning a potential malpractice claim with a skilled professional.